Dear friends this is time of L PG (Liberalization Privatization and Globalization)

I would also like the share one story that we

There was a cap seller. He went from town to town to sell caps. Sometimes he had to
pass the forest. At night he kept his caps and slept under a tree. In the morning
when he got up his caps were missing. He looked here and there and heard some
noise and he looked up and saw that the monkeys had taken his caps. The cap sellers
threw stones on the monkeys and the monkeys threw mangoes to protect themselves
from the cap sellers.
The cap seller had an idea. He took his cap and threw it on the grass. The monkeys
also threw the caps on the grass. The cap seller took the caps happily.
After a time that incident was shared by the cap seller to his son and advised to son
if u faced the same problem do like that as I did. Son was happy to get the practical
idea from the father. After 1 year seller got expired and his son started the same
business and one day he faced the same problem as his father faced below same tree.
He remove his cap from head very happily and thrown away but after a long time
waiting not done by the monkey. Son of cap seller asked to monkey why you are not
throwing, as in case of my father. My father had told me that you will repeat the
activity. Monkey replied How can you think my father also shared the same incident
with me .
Moral of story dont take any thing as granted and be careful in time of LPG
TOWARDS LIBERALISATION AND GLOBALISATION
This chapter deals with the govts policy of liberalization, globalisation and privatization. The need for a
change in the policies of theGovt and also The World Trade Organisation which is the most important
organizations that influences the implementation of new policies and their impact on the Indian economy.
The meaning of sustainable economic development and its relevance in the context of the new policies also
being discussed.
INDIAS DEVELOPMENT STRATEGY PRIOR TO 1991-AN EVALUATION
Prior to 1991, India followed mixed economy and the control of critical industries such as coal mining;
steel, power and roads were under the control of the govt. The private sectors were allowed to establish
certain industries again under the rules and regulations of the govt. In case of the public sector, the Govt
invested a large amount and the purpose behind this strategy was to remove poverty, reduce inequalities in
the distribution of income and wealth and to achieve economic growth and social justice.
POSITIVE ASPECTS:
This strategy has created
-A large industrial base and increase in industrial production.
-The proportion of population living below poverty line has declined.

-India has become self sufficient in food grains

-A base for export-oriented industries has been created.
-India has mobilized savings and created their own resources.
-Educational institutions have produced large number of scientists and technically skilled working people.
-This has helped in industrial and technological growth and self-reliance.
NEGATIVE ASPECTS:
-Industrialisation did not take place as per the expectation.
-The growth rate of industrial production declined from 8% to 4%.
-The laws that were framed to regulate the private sector were responsible for slow growth of Industrial
sector.
-These laws have also failed to reduce the concentration of economic power in the private sector.
-Corruption, lack of efficiency in work and ineffective management became the common features of the
public sector.
-Many public sector companies were making losses.
-Official machinery became a major hindrance to the development.
NEED FOR REFORMS: Not only the negative aspects but also several problems like rising prices,
shortage of adequate capital, slow economic development and technological backwardness contributed to
the increase in govts expenditure than the revenue.
Indias borrowings (1991) from abroad had increased to that level Indian Govt had to borrow money from
World Bank and IMF.
All these factors led to the framing a New Economic Policy (NEP) that contains three strategies
liberalization, privatization and globalisation.
LIBERALISATION AND GLOBALISATION: MEANING AND PROCESSES
LIBERALISATION contains two components.
-Allow the private sector to run those activities which were restricted earlier only to public sector.
-Relaxation of rules and regulations which were restricted to the growth of private sector.
PEOCESSES:
-Private sector has been allowed to produce all the goods except alcohol, cigarettes, hazardous chemicals,
industrial explosives, electronic aerospace and drugs and pharmaceuticals.

-Industries reserved for public sector has been reduced from 17 to 3.

-Private sector can also enter in to core industries like iron and steel, electricity, air transport, shipbuilding,
heavy machinery and some defence goods.
The private sector has been freed from many regulations such as (a) licensing (b) permission to import raw
materials (c) regulation on price and distribution and (d) restriction on investment by large business
companies.
GLOBALISATION: Integrating the Indian economy with the world economy.
-Many producers from outside the country can sell their goods and services in India.
-India can also sell its goods and services to other countries.
-Globalisation facilitates those who have capital to establish enterprises in India, produce goods for sale
within the country or export them.
-Entrepreneurs from India also can go and invest in other countries.
-Not only the movement of capital but also the movement of people takes place.
-Exchange of capital, technology and experience take place between the various countries of the world.
-Govt has removed restrictions on import of goods, reduced taxes on imported goods and encouraged
investors from abroad to invest in India.

LIBERALISATION AND GLOBALISATION IN INDIA- AN EVALUATION:

Visible changes(a) Better services in the communication sector, such as telephone facilities, availability of electronic
goods such as TV etc at low prices.
(b) Emergence of food processing companies for various types of food and drinks.
Invisible Changes
(a)
(b)

(c)
(d)

(e)

Indias share in trade of goods and services in the world has increased, though a bit slow.
Investments from other countries (Foreign Direct Investment) to produce goods and services
in India has increased.
The price rise has slowly declined from 12% in 1990-91 to 5% in late 1990s.
The new policies have generated employment though not sufficient to meet the increasing
requirement of the Country.
Industrial growth is not up to the expected level.

HRD in the Era of LPG

The liberalization and globalization process, which has come over the Indian
economy in the last sixteen years, has given birth to a fair number of fly-by-night
small enterprises which hope to gain legitimacy and foster rapid growth by setting up
a Human Resource Department. This paper, based on the authors' own experience,
portrays, in an unrestrained manner, the fate that could easily overtake the
unfortunate H.R. professional.
As Sadri, Ray and Hegde had argued, winds of change have swept the economy and
the polity of India. The country has moved towards a free market economy. Old rules
of the game have been discarded and new rules have been made. Old citadels of
power have made way for new baron to take charge. The Nehruvian concept of a
socialistic pattern of society,(weather that meant), has been replaced by an IMF
influenced liberalization policy. Indian economic thought has undergone radical
charges. It is in this climate of change that we seek to look at Organizational
Restructuring, Human Resource Development, Training and Development and what
they mean for the employees. The article champions no cause nor does it wave any
manifesto. All that is attempted is a reexamination of a particular aspect of the
Human Resource Professional in a changed environment over which he has little
control.
Development of the Personnel and H.R. Function in India.
The 1950s in India saw the birth of the Personnel Function when outdated
technocrats and retired army officials were appointed by industry to look after
workers' interest. The 1960s saw a stress on the welfare attitude in the personnel
profession. Then Labour Officers became interested in looking after canteens and
latrines, meals and uniforms. the 1970s witnessed the introduction of the legal angle
so that the adjudication of disputes became important and personnel officers went
about obtaining law degrees to horn their legal skills for use on the shop floor. The
1980s saw an enlargement of the legal aspect, so that collective bargaining became
the most important skill of the Personnel Officer. Bipartite negotiations were
complemented by union militancy during the first half of the decade and by
management militancy during the second half. The 1990s saw the era of participative
management on the one hand and the slow withering away of unions on the others.
To use the terminology of the legendary C Wright Mills, union leaders became
managers of discontent, while the bourgeoisie infiltrated the ranks of the managers.
Economic Liberalization
Ray and Sadri have already pointed out that since India began to liberate its
economy and its market in 1991, a certain amount of uncertainty has crept into
some segments of the economy. One prominent segment is the so-called "public
sector" which really is a form of state capitalism. It was "protected" by a variety of
concessions, all in the private sector were often taken over by this sector, to preserve
employment at all costs instead of allowing them to liquidate their assets. In the
case of basic and key industries as listed under the Industrial Policy Resolution of
1956,rigid bureaucratic controls and a lack of accountability generally kept per capita
productivity miserably low. There was, however, a limit beyond which the economy
could not afford to main these non-profit making centers on the dole, especially
when the country itself was passing through an economic crisis as in the early 1990s.

When India finally had to seek a financial bail-out from the World Bank and the IMF,
certain conditionalities were imposed on the Government. One of these was to
liberate the markets, to encourage private industry, and open the economy of the
world. Now when you have tied up the hands and feet of a man for 45 years and you
suddenly untie them and tell him to compete with Carl Lewis, will he succeed?
However, the Indian Government and the news media, after years of protected state
capitalism, wanted liberalization to succeed over-night.
Side Effects of Liberalization on H.R.D.
Scholars and managements were busy eulogizing the virtues of "liberalization" and
the economic and social benefits that would flow from a free market economy.
However, in their zeal to pursue that elusive rainbow, they forgot the importance of
the human resource. They, ideologues tended to be polarized. After all, an extreme
form of capitalism produced a Hitler just as an extreme form of socialism gave birth
to a Stalin, and under both conditions, the exploitation of the human resource was
equally horrendous. This paper tries to show that the human resource can neither be
taken for granted nor can its importance be ignored without society having to pay
enormous costs in the future.
Firms, which had previously been hankering for licenses to produce for a captive
market suddenly, changed their focus and began seeking greater efficiency and
productivity at all levels. Gaining the competitive edge become the most important
concern for all and sundry. Some of the bigger and more reputed firms retained their
culture, ethics and ethos while several of smaller once began to cut corners. This
paper, based on real life experiences, is concerned only with the latter, i.e. with the
small firm, which is a relatively new player in the competitive market and which, is
desperately trying to become a multinational overnight. No sideswipes are intended
and no person or organization is being alluded to.
Owners of such firms faced for the first time with dynamic market competition from
local and international products did not wish to cut their fixed costs. So they began
to cut their variable costs. When this was not enough to produce the profits they
desired, they began to treat human resources as a variable cost to be cut down.
Let us here briefly recall the development of Human Resource Management (HRM) in
welfare officers required by the Factory's Act, we have traveled a long way into the
present day scenario when most organizations, if not of need, at least for fashion,
employ someone exclusively to adorn the position of Human Resource Manager. It
has taken a considerable period for employers really to realize the need for human
resource managers in India; and just as we were in the process of implementing this
realization, the markets began to be liberated and we are now faced with another
turbulent period. Employers, faced with such tremendous changes in the
environment had once again to grapple with the question of human relations in
industry. How important is the human being? Is it necessary to reorder priorities and
to see weather the earlier realization of the importance of human resource
management needs modification. HRM once again occupied the limelight.
One important point to bear in the mind is that in India the advantages reaped by
industries in terms of low labour costs are overshadowed by even lower labour
productivity and other factors such as high energy costs, absurdly high interest rates
of borrowed capital. This is the perhaps the best manifestation of executives having

to take corporate decisions in a hostile external environment. One clear conclusion,

however, is that HRD initiatives have perforce to be focused on building a vibrant
corporate culture on the one hand and increasing the per capita productivity of the
employees on the other. With this broad agenda, the HRD executive has his work cut
out for him for another few years at least.
The hostile environment we have mentioned does little to attract to foreign capital
which is vital for growth in a market economy. Even Indian investors are today
shying away from the stock markets. Now if the circulation of money in the economy
falls, employers cannot make profits. How then can industry flourished? Yet, when
the axe has to fall and blame is to be attributed the HRD executive makes an ideal "
fall guy". Therefore, he tries to build a halo around his specialty by coining new
terms and phrases like old wine in new bottles. Nevertheless one of the most
mouthed buzz words in Indian industrial centers today is Human Resource
Development (HRD), which rivals even "Business |Process Reengineering (BPR)".
Such is the popularity of HRD that it is not surprising to find an ex-receptionist
masquerading as a consultant in human resources administration or an ex-salesman
gifted with the gap elevating himself to the position of a Management Trainer. Part
time and distance learning courses give them a sort of legitimacy to stake their claim
and easy to read manuals enable them to show their expertise to a limited audience.
The limited audience which is addressed, has a three-fold advantage from the
consultant's point of view,. First of all, their knowledge of the subject is so limited
that they can easily be taken in by training and are afraid that a bad remark from the
trainer could affect their careers. Thirdly, they are generally so awestruck by the
trainer that they accept to be fobbed off with a reporter or a clever joke when they
have asked a serious question.
These disadvantages of the trainees are compounded by the sketchy knowledge on
the part of several corporate managers regarding what exactly is HRD. This
sometimes leads senior executives who are out of date and out of touch with their
mother discipline to concentrate on HRD, which in their limited wisdom, they
consider a soft option.
Business Process Reengineering (BPR)
To argue that globalization without completing the liberalization process is a fatal
economic flaw that is not understood by many corporate managers. They all wish to
globalize their operations even though such things as the primitive 'octroi' duty
remain part of the present economy five years after the reforms began! The Spate of
reforms ushered in over the past years, as we know, have forced top management to
sit up and think. Small time entrepreneurs trading on the margin and speculating
with venture capital have suddenly found out they can become very rich. The urge to
grow richer takes them to consultants who often are professional dilettantes of the
same ilk as the H.R. "specialists" alluded to. These "consultants" have a sure for all
ills, a panacea for all organizational needs B.P.R. or business process
reengineering.
Once top management has been made to swallow the bait, the organization is
committed to BPR hook line and sinker. Top management then insists on a sea
change in attitudes overnight and expects employees to think in terms of teams,
goals, processes and HRD is expected to perform the magic to make all this happen.

Many a time top management has no clue what HRD is all about and yet they seek
HRD interventions.
The CEOs and MDs if such firms often say "the only thing constant in this company is
change", and what is most damaging to the organization is that all change is seen as
synonymous with progress. The CEO quite often finds himself on the horns of a
dilemma when he wants the organization to change with the times but is unable to
do so himself. The sweep back can be catastrophic the CEO pushes the organization
forward, but his own unwillingness to let go of power creates contradictions at all
levels in the organization.
Empowerment and other Contradictions
The first instance of contradiction is seen when top management speaks of
empowerment but is unwilling to let senior executives decided without a nod from
the CEO. This means that, whereas, the organization is supposed to be flexible to
keep in tune with market realities, its executives are bound by old authoritarian
structures. Thus, opportunities are lost, decisions are made based on individual
preferences, power games are played and sycophancy thrives. Mediocrity is safe, as
it poses no threat, to those at the top.
The second contradiction is to be found when CEOs speak of trust, faith and
delegation but at the same time have a very powerful "internal audit" department
whose ambit of concern spreads far beyond checking accounts. Is it a surprise then
that good chartered accounts shy away from internal audit? Only those who cannot
make it elsewhere or have a nasty streak in their character often opt for this, if only
to increase their nuisance value. When internal audit gains precedence in this fashion
all HRD initiatives will go out of the windows, because the small employer understand
the financial bottom line better than the needs of human beings. Since every activity
is now reduced to monetary terms, Internal Audit is concerned with everything. In
short it is the eyes and ears of top management, its men are universally abhorred
and kept at arms length by every professional: accountant, technologist human
resources expert, systems analyst and others in the organization. Some
organizations have even moved to a higher level of sophistication in management by
remote control and call this department Corporate Governance.
The Third Example of contradiction can be found when CEOs speak of Transparency
and Openness while almost every sensitive aspect of management remains a closely
guarded secret. In short, transparency at the lower level is a must, but transparency
at the top is a term reserved exclusively for business meetings and managers
conferences. It is quite common, for instance, to find a company claiming to have
one foot in the 21st century when there is trusted blood relative of top management
placed in each department to give regular and personalized feedback on the others.
The list of contradictions, though quite long, need not be further lengthened. Suffice
it is to say that these CEOs and those close to them, hardly if ever," walk their talk".
What invariably happens is that small pocket of power emerge with their own
informal rules and their special bonds of loyalty where the mediocrities with one
another for greater influence.
Effect on the HR Professional

In their bid to appear progressive, these companies which are trying to move from
the status of private businesses to corporate houses often recruit top class H.R.
professionals. However, the fact is that the transition from private ownership and
control to a modern organization is prevented from happening by the sheer weight of
external contradictions which takes time to sink into the consciousness of these
recently hired professionals. By the time this happens, the damage is done and if the
professional is sloe to act, the damage is compounded.
At this point yet another contradiction emerges: that between what the HR
professional wishes to achieve and is able to achieve. First of all, the professional
frame logical polices which will hopefully improve structures and functions. However,
all policies need approval from the CEO and this can take up to six months on even
minor issues. The HR Professional then slowly realizes that, unless old rules are
discarded, any reorganization achieved will be no more effective than dusting the
furniture in Pompeii.
Perhaps the greatest handicap the HR Professional faces is the mediocrity he has
inherited which with its power broking capacity will now allow its incompetence to be
made public. Hence sabotage begins at the door of the H.R. Division. The pulse rate
of the H.R. H.R. Professional increases when he finds that every provision of labor
legislation has been flouted with impunity. Premises are not registered either under
the Factories Act or under the Shops and Establishments Acts; Provident Fund
returns have not been submitted and it is anybody's guess where the funds have
gone; graduate's is being paid below the statutory minimum rate; the provisions of
the Employee State Insurance Scheme are quietly side stepped. And, when
inspectors do call in, the management unite to decry what is emphatically called the
"inspector raj". More freedom is demanded without specifying freedom to do what"?
The HR person's heightened pulse rate leads to a higher blood pressure when
attempts to pay for performance are subjected to top management's perception of
performance at the individual level. In comes the internal audit man or the "blood
relative" to decide who has performed and who has not. Appraisal forms are filled,
data may or may not be analyzed, but increments operate on their own logic.
The unkindest cut of all comes when despite weak fundamentals the CEO announces
that the Company must grow from strength to strength, and in process more
manpower needed. To give the illusion of growth, revenue earned, from the sale of
equity shares is included in the turnover. Much to the chagrin of the HR professional
who advises caution, he is told that either he is not effective or possesses no
business sense. All this is fine until the market no longer swallows the pill and the
product does not sell. Suddenly the bubble bursts and the reality of the market
overtakes the mirage of the visionary CEO. The HR professional is then the fall guy
who has to go ahead with reduction in manpower, agree to increments not
necessarily based on the performance and justify the unjustifiable. What happen to
HR professional? Does he make a transition from being an icon worshipper to an
iconoclast? Does he resign to himself to his fate and become "his master's voice"? Or
does he beat a speedy exit in the hope of flourishing elsewhere? And should he quite,
what prevents his past employer from floating nefarious whispers against him in the
employment market?
Whatever he finally does, the HR professional will end up being a better judge of
corporate CEOs who wish to develop too fast for their own good. What of the rest of

the employees? Well they become unwitting canon fodder, but what of the
mediocrities? They are safe since they are willing to cajole, please, adept and carry
on. But the greatest damage is inflicted on the national economy. Since it is the
economy which permitted these companies to get rich quickly, it is the economy that
must pay for their misdemeanors.
The liberalization theorists must not lose sight of the fact that when they sow the
wind, they will also reap the whirlwind. So much for the political economist on the
either end of the ideological polarity to munch over. As for the HR professional, he is
caught in a cleft stick. He can not take sides, is expected thoroughly ethical and
prepared to bear his own cross. He is that change agent whom the CEO afraid to
empower. He fills like a fish out of water when surrounded by the mediocrities in
whose company the CEO is quit comfortable.
Insecure trade unionists resist change and employ every trick in the book to retain
status quo. The insurance first line supervisor aids this resistance. In organizations
where trade union tendency is thankfully not present, the existence of mediocrity is
sometimes compounded by the false consciousness of the management and the
aristocracy of labor leaders from the outside the organization who are more
interested in money, symbol of status, designations etc. than achieving the real
progress. Trade unions then become super become superfluous, not so much
because the growing consumerisms of the work force make them think unions can be
dispensed with. Managements become more paternalistic and only mouth platitudes
of progress from time to time. And lack the means of communicating ideas of the
true progress.
Organizational change, must of necessity, is form the top ten downward. But will the
top echelons of management accept change in regard to Human Resource
Development. The CEO likely to fall back on the fact that although wages are low,
labour productivity is also low, interest rates on capital are high and energy costs are
exorbitant. He will be more likely to watch the bottom line than promote human
relations. After all, the CEO would argue, with such a large reserve army of the
unemployed he can afford to be high handed. (The cost of leaving, turnover and
wastage rates and the cost of training seldom enter into his calculations.) Again,
apart from the attitude of the CEO, labor and the structural organizational
constrains, the low productivity of labor is partly the result of the poor quality of
manpower employed. And, this in turn, is partly the result of the low compensation
packages offered. These catch 22 types of situation is quite a common feature in
many smaller organizations which are springing up all over the country rendering
them not as competitive as they need to be. In this situation, HR professionals
supposed to "build team spirit" and "motivate the workforce" as if he possesses a
magic wand to do so. The HR professional then has no choice but to first convince
the CEO that promoting internal employee satisfaction is a necessary first step to
take. However, the latter, reacting to the pressure of the market, will be reluctant to
accept this. He will plan in the short term and immediate survival will be his major
preoccupation. If the CEO is a fixer or a mediocrity himself, he will find hard to even
understand the HR professional's argument.
Hence, this fall guy, the HR professional, has no choice but to either take the
initiative or walk away. Should he opt for the former, he has a lot a lot of work cut
out for him. He must being by eschewing mediocrity for himself as well as among
those he recruits, for he knows that a team throws up its own leadership, and a team

of mediocre persons can only throw up a mediocre leader. This is actually happening
and one look around will convince anybody that mediocrity abounds
in
the world of small business. Today,
unfortunately, we find that seldom before has so much managerial mediocrity been
so adequately rewarded.
This LPG exercise (liberalization, privatization, and globalization) has forced the HR
Professionals to undertake an exercise of its own. It is called PTG (Pray to God) in
the pious hope He can provide an answer.

An HR Perspective of Organisational Excellence

Men and women who have held official positions of some importance start developing
phobias when retirement is imminent and start looking for family support when they
have discarded the self-same families and lived in a world of selfish indulgences
when the going was good. People also seek conformity, (to norms convenient to their
personal well-being), as an insurance against perceived depletion of power and
privileges, which they have been enjoying, and deep down they realise that this feelgood experience may be short-lived. Executives who have lived high profile lives
often fear that after retirement they may become socially insignificant. These are
those who harboured feelings based on false consciousness. On the other hand
persons who have lived their lives ethically do not harbour such fear since ethics
sustains authority.
There are several examples like the ones cited above but from times immemorial
men have fashioned unfreedom, which is a large measure of conformity, as a bribe
for self-perpetuation. In the words of Peters and Waterman, men quite often willingly
shackle themselves to mundane, pen pushing, clerical nine to five jobs, if only the
cause is perceived to be something great. Management is as guilty of perpetuating
this sense of false consciousness amongst its workforce as is the employee for
lamely accepting it. Organised ritual based religion performs the same function for
the larger civil society as the government does for the over-staffed and under
ambitious minions in the civil service. Little does the government realise what moral
crime it is committing against humanity. How can, for instance, an employee or a
person be rendered surplus? It means either one or all of these four things. The
recruiter goofed up. The top management failed to create a competitive organisation.
The manager was not creative enough to generate work. The Human Resources
department failed to develop the employee so that he/she could add value to the
organisation and thus not become surplus. How can organisational excellence be
achieved under such conditions and why does the HR Expert not have the gumption
to shoulder the blame?
Positive economists do not fail to remind us that all value is created by labour that
capital man made aid to production that production is the creation of value and
consumption is but the transformation or destruction thereof. Sociologists constantly
harp on the theme that in the pursuit of a better quality of life mankind has evoked
interest in the sciences, the arts, religion and the philosophies in the hope that their
lot will be better. Historians vouchsafe that man has sought excellence through his
efforts has left behind markings of his footsteps on the sands of time. And yet when
we go to a symposium of experts on excellence all we hear is words like systems,
processes, procedures and market competition. Where did man, the basic creator of
value disappear in this new calculus? This short piece is aimed at finding out why

Indian companies do not attain the much-needed maturity to be truly competitive

and thereby approach excellence.
It is found that only a few top companies like Wipro, Infosys and TCS in information
technology, Ranbaxy and Sun in the pharmaceutical industry, Tata Steel, Godrej
Industries, Tata Motors, HDFC and ICICI Banks, NDDB, SAIL, BHEL and NTPC, have
attained a measure of excellence. This is because in other organisations the basic
labour force, the man behind the machine or the desk, is conveniently asked to play
a secondary role to technology.
Surely, the CEO must have gone to a good B-School or an elite University. How could
he/she but not know this simple fact? Why is there such a great divide between the
theory and practice of people management and why is Organisational Excellence so
illusive? Is it enough to devise and put into place an ethical culture and good
governance practices? What is the role of Human Resources Management in helping
the organisation to achieve excellence? The fact that business ethics and corporate
governance is an intrinsic part of building Organisational Excellence can no longer be
doubted. But in exploring the reasons behind the great divide between the theory
and practice of management and the failure to achieve excellence, the role of Human
Resources Management (as a specialisation) is thrown up for critical examination.
This is an aspect of objective social reality that this short paper shall try to examine
briefly.
Themes that generally emerge when we examine the gap between the theory and
practice of management unmistakably point towards the fact that the HR function
does not or is not allowed to pull its weight. We shall address six of the main ones,
which if satisfactorily approached even if not wholly resolved will make a positive
difference. These are:

The competitive challenges faced by organisations.

The extent to which TQM (total quality management) has been practised.
Evolution of a learning organisation.
Outsourcing the legitimate HR functions.
Self-assessment frameworks and their role in modern times.
Approaches founded on performance management systems.

Competitive Challenges: Organisations have long since realised that the only way
to thrive on the cutting edge of market competition is to use technology to convert
their core competence into competitive advantage. Organisations consequently need
to learn how best to respond and adapt to the plethora of discontinuities of life. An
organisation is known by the type and competence of people it has and not by the
physical infrastructure it exhibits. The service mindset has to pervade every facet of
corporate life and organisations have to compete along several dimensions to meet
customer needs.
Visionary leadership is not enough since it has to be sustainable in nature and this
comes from it being value centred at the same time. Change orientation in every
facet of organisational life must be such that divergent skills and behaviours combine
to achieve convergent aims and objectives. Organisations must have goal focus,
customer focus and market focus at the same time. The customer and the market
have become more important that profits and technology. The latter were the drivers

of progress in the 1980s and the 1990s while the former have become the
organisational drivers in the 2000 era. The key question posed is thus: do
organisational results match the demands and expectations of the market and the
customer? If not, then sustainability will be short lived.
Total Quality Management: It is most unfortunate that TQM is a term that is heard
only in classrooms and seminar halls. It is not as often seen in organisational
practice, as it ought to be. The promised gains of the LPG exercise are slow in
materialising and the ranks of the self-employed and the un-employed persons are
rising. If one reads the daily newspapers one finds out that scheming and scamming
have become the order of the day. Entrepreneurs get rich at the expense of the
organisations they have promoted. If one reads academic journals and the research
findings that are reported in them, another story emerges. Top management is not
visibly involved in integrating quality into strategic planning. Even managers who
speak most vociferously about change and transparency are unable to change their
own ways of doing things or accept that they need to be transparent themselves.
How should senior managers provide the much needed direction and how should
performance be measured at the strategic level remain issues of serious concern?
The Eastern Hotels Group has a lesson or two to teach their industry in this arena.
Financial compulsions and short run profit motives overshadow the imperatives of
quality management and customer satisfaction. There is a visible gap between
knowing what out to be done and doing what needs to be done. Perhaps the reason
is that top management is caught up in the glamour of event management and short
run actual cost considerations that it is in market orientation and long run
opportunity cost considerations. Hence a sea change in the top-level mindset is
called for and quality must become a way of life. Concepts like Economic Value added
(EVA) and severe consequence management (SCM) need to be pursued with zeal and
actualised. The corporate strategy itself must be well thought out, well managed and
be capable of converting customers into clients.
The Learning Organisation: Top management needs to have the maturity and the
ability to understand and learn from organisational performance and outcomes. New
compulsions demand that new organisational competencies emerge and new
strategies are harnessed. Value centred leadership, visionary stewardship, the ability
to learn from the mistakes made by themselves and those of others, seizing
opportunities for change, creativity and innovation, and restoring the dignity of
labour are the new HR mantras of the 21 st century. How these competencies are
recognised, how the existing talent is nurtured, how to create multiple teams that
complement each other's efforts and how to get ahead of oneself become the major
HR concerns.
Empowerment and accountability must go hand in hand. HR strategy for this reason
must be inseparable from HR execution. The road ahead must be well mapped,
realistic and user friendly if organisational goals are to be achieved. People
Management must replace the term Human Resource Management since people are
not inanimate resources like silica sand and cement bricks. The sense of belonging
must be so enhanced that people start saying and acting as if (a) the organisation
belongs to me, and (b) I belong to the organisation. Hence new managerial
competencies need to be developed and this has to be so demonstrated that people
would "want" to be a part of the growth process. Above all else, management must

learn that since it cannot alter the direction of the wind, it can always alter the angle
of its sails to get ahead with its dream.
Outsourcing HR Functions: The bogey of Business Process Outsourcing that has
come fast on the heels of Business Process Re-engineering seems to have caught the
fascination of many a HR Chief. It first began with hiring persons equipped to fill out
various returns required under Indian labour legislation. Most of these persons were
either moonlighting from government offices where they were employed full time or
had been working as such prior to their retirement and knew how to pull the right
ropes. The came the period when trainers were hired to impart special skills and
behaviours that HR departments felt that their organisation's employees needed.
That scientific diagnosis often did not precede such activities is well known. Then
came the era of hiring the services of placement consultants to pick and choose
manpower and thereby cut down recruitment costs. At this point something nefarious
happened. The trainers tied up (informally) with the recruiting consultants. The level
of attrition rose especially in the software industries sector and together the financial
fortunes of the trainer and the recruitment consultant flourished. Just about the
same time (in the 1990s) companies went in for Business Process Re-engineering.
The task was invariably assigned to managerial greenhorns and not to the
experienced people managers. The result was that organisational structures were
flattened and accountability was emphasised but delegation of authority did not
follow. Just when top management decided that BPR was not such a good thing after
all, the new mantra of BPO shot into prominence. The more enlightened companies
introduced computer packages like Peoplesoft and Ramco while the not so bright
management actually outsourced the HRIS function.
Incessant pressures on organisations to be goal focused, customer focused and
market focused remained. Retention, reward & recognition and career development
became a part of HR strategy. Structures and functions concurrently collapsed just as
organisational goals and managerial roles began to unfold and expand. It was then
that Strategic HR consciously replaced HR Strategy, and People Management as a
specialisation, reached its maturity. Experience which was a treasured trait until fairly
recently was replaced by talent which was a trait that was prized and hence
managed and developed. As has been argued in Geometry of HR (2002), one thing
that cannot be outsourced is Corporate Culture Building. This is what People
Management today must be concerned with and this is where ethics and governance
have a positive role to play.
Self-Assessment Frameworks: In the journey towards excellence, selfassessment awards and frameworks lay claim to being the vehicles for organisational
learning. Unfortunately the weight of evidence is against it and more organisations
use the business excellence model than those who use self-assessment frameworks.
But the business excellence model itself is a questionable construct in several
organisations. This is because of many reasons. Firstly the validity of Business
Results criteria is open to question. How can star organisations that were awarded
accolades for good governance become sick babies the very next year, as was the
case with UTI and L&T? Secondly the measurement of the link between internal
improvements (called enablers) and business results is often blurred. Language used
in the business excellence model is often open to varied interpretations, unless of
course it happens to be written in Sanskrit where one word can have only one
meaning! User judgement in identifying key processes is not always uniform and

unless a high degree of quality maturity has been attained, award frameworks will
remain public relations exercises that use political leverage to build corporate brands.
We often hear of great scientists who have almost become cult figures in the 2000
decade, when in reality their last real research paper was written three decades ago.
Today they may well have become social icons who are out of touch with the very
subject in which they are held to be gurus. If competitiveness must be sustained
then it follows that excellence must become a habit and all managerial activity in an
organisation must be value-centred. One must constantly compete with oneself and
erase the word impossible from one's lexicon. It was once believed that the human
body was incapable of running the mile in less than 4 minutes. When Roger Banister
broke the illusion clocking 3 minutes and 59 seconds in May 1954 people took it as a
freak incident. But how can we also thing so since the 4 minute a mile record has
been broken over a few hundred times since then? Hence self-assessment is limited
by the fact that one wishes to improve constantly and realises that the last rung of
the ladder risen to is not to be rested upon but used to climb higher still. The answer
therefore lies in developing multi-dimensional and dynamic models for monitoring
corporate performance.
Performance Management Systems: One only has to look around to find that
since 1991-2 Indian organisations have begun to seek assistance with defining
drivers, which will aid the self-assessment process. There is little doubt that well
framed performance management systems provide both the focus and the impetus
for organisational development. However HR experts like P C Shejwalkar, Sorab Sadri
and Mihir Ajgaonkar will tell you that the key to developing strategic abilities is
reflection on outcomes. Hence it is only logical that a good performance
management system will embody sufficient data, documentation and specific
information to enable proper reflection and evaluation to take place.
In order to achieve the above, performance management systems must no longer be
generic, as is the case in many Indian organisations. This inhibits opportunities for
learning to take place since they are inflexible and cannot provide the desired
responsiveness to changing environment. Organisations then tend to be so reactive
that they develop an auto rickshaw mentality where the driver of the vehicle is not in
control of its direction and destiny, depending upon the passenger in the backseat to
determine this.
The sum and substance of the six points highlighted above is that as long as these
six issues are not strategically resolved, organisational excellence cannot be attained.
Logically then, it can be argued that since most organisations in India have failed to
address these issues effectively organisational non-excellence has been the
inevitable result. Except for a handful of corporate players (who we all know about)
Indian business and industry are not internationally competitive and while we have
1/7th of the world's population we barely control 1% of the global trade. The answer
to this malaise lies in giving People Management its rightful place in the corporate
world and making Strategic HR inevitable. The fact that value centred leadership
backed by business ethics and good corporate governance is the launching pad for
attaining organisational excellence is taken for granted. But in addition to these,
Strategic HR has a specific duty to perform before organisational excellence is
realised. To enable this to happen we put forward ten strategic initiatives, which
must be conceptualised, realised, managed and delivered. Only then can the wheel
of corporate fortune be turned around from a position of organisational non-

excellence to global level excellence. On the basis of the author's study, it is argued
that the following imperatives are required if organisational excellence is to be
achieved.
THE TEN COMMANDMENTS OF HR IN THE TWENTY FIRST CENTURY.
1. The first task for Strategic HR Managers is converting the mindset of those at the
top. Get top management convinced, committed and involved in the journey towards
excellence. Once those at the top start walking their talk and leading by example
breaking mental barriers of those down the hierarchy becomes relatively easy. And
once mental barriers have been effectively broken only then change management
can be introduced. If not, change management will remain at the level of window
dressing that adds a frill to the annual report and nothing more. Excellence will then
remain a mirage and HR will be held responsible for it, and in this author's opinion,
justly so.
2. For the HR Expert to change the mindset of those at the top he/she must possess
both an agile mind that can spot opportunities and a nimble disposition to convince
those that matter. He/she must be able to diagnose the situation and strategically
address the key performance indicators (KPI) head on. For this the HR must also
develop his/her own vision that is capable of energising the workforce to develop
trust relations and transparency so that teamwork is the inevitable result. And no
matter how good a player Pele may have been, he still needed the other ten players
to take Brazil to the great heights in international football. Achieving organisational
excellence and the role of Strategic HR within it is not much different.
3. Logically the bottleneck is always at the top of the bottle. So is the case with
organisations in India that are positivist and operate from the top downwards.
Hence if anything good has to happen and any examples are to be set these must
emanate from the top and percolate downwards with the active assistance of HR.
The first rule to follow is that we must be creative and constantly innovate at the
level of goals, roles, processes and products. If not we shall stagnate and go the
dinosaur way since that great animal disappeared from the face of the earth just
because it could not adjust to environmental changes.
4. The Strategic HR Expert must actively work to negate the influence of the
mediocract-bureaucrat who looks at the letter of the law and not the spirit of the law
and who does not realise that the process of administration is less important than
the purpose of administration. He/she consequently misses the wood for the trees
and becomes a stumbling block on the path to progress. To register developmental
growth he/she must be identified and isolated as an organisational priority.
5. Organisations must get into the habit of using technology gainfully for the good of
all. This must be done while consciously remembering that technology was meant to
serve man and not the other way around. As economists like Sorab Sadri have
always argued, technology is but a commodity, albeit a unique commodity that you
purchase without seeing. For, if you see it you need not have to purchase it. This is
just what the great Japanese reverse engineering experiment was all about. The
innovator who spent hours in the laboratory or in the library would not be justly
rewarded for efforts made if technology were to be freely available. Hence it comes
at a price. Hence the brouhaha about TRIPS and TRIMS can be well appreciated. And

since technology always comes with a price tag it must be used wisely as an
investment multiplier.
6. If people are to perform excellently they must constantly benchmark against their
own past achievements and better the record. The impossible can become very much
possible as was the case with running the four minute mile. To do so goals must be
set such that the employee is stretched to his/her limits and are able to cover that
extra mile which lesser players could not. These stretch goals must be tough but
realistic and achievable so that the employee does not get frustrated. In addition, the
environment to enable achievement must be made conducive so that the motivation
to excel is retained. This is what Strategic HR intervention must ensure through its
proactive policies and practices.
7. Several HR Experts who have been otherwise brilliant have failed only because of
their inability to balance priorities. There is no golden principle to guide somehow
how to prioritise. It has to be developed keeping in mind the organisational
constraints and the market imperatives. The ends-means debate features
prominently in this exercise. This, in the author's opinion, is the key to the HR
function empowering itself and leading the organisation towards excellence.
8. People across the organisational hierarchy must be given a free hand to take
calculated risks since the old adage nothing ventured, nothing gained is as relevant
today as it ever was. But the risk must not jeopardise the organisational image,
damage the brand value of its product or cause irreparable damage to its finances.
As long the intentions are bona fide, due diligence is exercised and basic belief
systems are not violated risk taking must be encouraged. After all risk brings with it
a just reward and organisations have often leveraged this first mover advantage in
the market as was the case with Naukri.dot.com. This can happen only if HR has
been successful is creating a value-centred corporate culture and the leadership
within the organisation is truly visionary.
9. Earlier it was argued that organisational leadership must be visionary, value
centred and be able to walk its talk. In addition, it is now argued that effective
leadership is one that also walks behind the managers lending them support and
pushing them upwards towards greater heights. To enable this to happen, managers
must be given adequate autonomy or simply more elbowroom to introspect and think
deeply, strategize and only then implement. This firstly means that managers must
learn to let go of their inhibitions, ghosts and fears before they can truly scale up.
And unless managers scale up they will not be able to overcome their ego and attain
what Abraham Maslow calls self-actualisation. This is the hallmark of excellence and
it is up to Strategic HR interventions to make it happen.
10. The Strategic HR Expert wears several hats in performing his/her task of
developing teams that will achieve organisational excellence. He/she must be
technologically savvy and yet be a people' person who exudes trust. He/she must be
a taskmaster with a genuinely sanguine and humane disposition. In the language of
Blake and Mouton he/she must be at least a 5.5.person and yet consciously aspire to
become a 10.10 person. He/she is thus a challenger, contributor, communicator and
collaborator all rolled into one. That is what makes the Strategic HR Expert an
indubitable part of the journey towards organisational excellence.

To conclude, this short diagnostic paper, the author has merely pointed out what
goes wrong and why organisational non-excellence is brought about. But a doctor
who diagnoses a patient and cannot recommend a cure is not worth much. Hence
the second part of this paper highlighted the role of People Management in bringing
about organisational excellence. And one must remember that people management,
is always predicated on strong values (Wipro, Godrej and Thermax) and good
governance (Infosys, Tata and NDDB). Both of these attributes combine to produce
excellence and excellence in turn is defined according to the accepted norms laid
down by the corporate leadership. For instance, the concept of excellence for the
Ambani Group may differ from that of the Aditya V Birla Group and what may be
quite acceptable to Tata Motors may not find any takers in SAIL. Nevertheless such
notions of excellence could be superficial and real excellence does manage to shine
through like a bright sun through the dense forests of ignorance and corruption.